March 31, 2000
Tobacco Lawyer Fights Damage Claims of Three Sick Smokers
Fighting their $14.4 million damage claim, a tobacco attorney,
representing Philip Morris Inc., R.J. Reynolds Tobacco Co., Brown &
Williamson Tobacco Corp., Lorillard Tobacco Co., Liggett Group Inc. and
the industry's Council for Tobacco Research and Tobacco Institute,
charged that three sick smokers shouldn't be paid for smoking after the
health dangers of cigarettes became a recognized part of American
culture, The Associated Press reported. 'It became embedded in this
country that smoking causes health risks,' Philip Morris attorney Dan
Webb said yesterday, adding that smokers shouldn't be rewarded for
'choosing to smoke cigarettes for many years' even after warning labels
appeared on cigarette packs. Industry attorneys are trying to avoid
paying anything to the three, who represent an estimated 500,000 Florida
smokers in the first class action lawsuit against the tobacco industry
to reach trial. The six-member jury, which already has decided the
industry conspired to make a dangerous product, is expected to begin
deliberating early next week. The tobacco industry fears that any
monetary awards and punitive damages could amount to hundreds of
billions of dollars.
A bill proposed in the Florida legislature would require a
compensatory award for all smokers covered by the lawsuit before a
punitive award could be set, and in North Carolina, Gov. Jim Hunt said
lawmakers need to consider measures to partially protect tobacco
companies from possible bankruptcy should the Florida jury award
billions of dollars to smokers. Hunt called a special legislative
session to be held April 5. Smokers' attorney Stanley Rosenblatt called
the Florida bill 'one of the most outrageous acts in the history of
legislation,' but Circuit Judge Robert Kaye said the bill was none of
his business and he planned to 'do what I have to do to get this trial
moving and resolved.'
Missing Peruvian Gold Forces Handy & Harman into
Bankruptcy
Handy & Harman Refining Group Inc., South Windor, Conn., a
member of the Golden West Refining Group of Australia, was forced to
seek bankruptcy protection after discovering that $12.5 million worth of
gold was missing in Peru, according to Reuters. The precious-metals
company, which filed chapter 11 on Tuesday in Hartford, Conn., has
'hundreds of creditors, and total claims against the debtor may exceed
$100 million,' said Handy & Harman's lawyer, Eric Henzy. Golden West
and one of Handy & Harman's creditors, Gerald Metals Inc. (GMI),
allege that on Feb. 21, Handy & Harman discovered that gold it had
purchased in Peru, worth approximately $12.5 million, was missing. A GMI
lawyer stated that in late January, 'Golden West commenced an
investigation into allegations made by an internal auditor of (Handy
& Harman) of alleged irregularities regarding (its) purchase of
certain gold in Peru.' The missing Peru gold 'left us in a position
where we could not meet all of the claims of our customers,' Henzy said.
'It's a pretty complex matter, but the plan is to work it out and pay
everybody.' Handy & Harman's president and CEO and most of its
senior management have reportedly either resigned or been terminated,
and its plant was closed to nearly all outgoing shipments on March 15.
However, Golden West stated that previous charges against three former
employees stemming from incidents from 1992-1996 'relate to various
precious metals transactions undertaken with gold fabrication companies
in Argentina prior to August 1996 and do not relate to the transactions
involving (Handy & Harman) in Peru.' Hearings on the bankruptcy are
scheduled next week. The company's subsidiary, Attleboro Refining Co.,
of Attleboro, Mass, is also seeking bankruptcy protection.
Daewoo Motor Workers Strike, Protest Foreign Carmakers' Bids
Fearing big layoffs, thousands of workers at Seoul, South Korea's
Daewoo Motor Co. went on strike today to protest the sale of their
troubled company to a foreign automaker, demanding that the government
buy their company and run it instead, the Associated Press reported.
Five carmakers, including General Motors Corp. and Ford Motor Co., are
bidding for Daewoo, South Korea's second-largest carmaker, and the
government and creditor banks say they are determined to sell the
company. Daewoo Motor workers said they will stay off the assembly lines
Saturday and Sunday and decide whether to continue the strike Monday.
Management stated it has enough inventory to make up for the work
stoppage, but expressed fear that if the strike were prolonged, it would
hurt Daewoo's exports and hundreds of subcontractors. The Daewoo
conglomerate narrowly escaped bankruptcy in June when its domestic
creditors agreed to delay the repayment of $8.3 billion in debt for six
months, and extended loans of $3.3 billion. At the end of June, Daewoo
Motor had $18.3 billion in total assets and $13.9 billion in debt.
Eagle Technologies Files for Bankruptcy Protection
Auto parts company Eagle Precision Technologies Inc., Toronto, is
restructuring its operations under bankruptcy protection, a move that
wiped out more than a fifth of the company's value on the Toronto stock
market, according to a newswire report. Eagle announced yesterday that
its board had approved the restructuring plan under the federal
Companies' Creditors Arrangement Act and that its lawyers were to
formally file the motion in Ontario Superior Court of Justice yesterday.
Under the restructuring proposal, Eagle's main banker and secured
creditor will provide $27 million in new loans, which will be used to
refinance existing debt to the bank and to fund operations, and will pay
unsecured creditors owed about $10 million about $500 each and issue
unsecured notes for the balance of the claims. Eagle said creditors and
shareholders will hold meetings to discuss the plan May 8. The company
manufactures auto parts at plants in Brantford, Ont. and at subsidiaries
in Cambridge, Ont., Carlsbad, Calif., Birkenhead, U.K. and Nesselwang,
Germany.
Lichtman's Files for Bankruptcy Protection
Toronto-based Lichtman's News and Books, Canada's largest
independent bookseller, declared bankruptcy yesterday, according to a
newswire report. The bookstore, which had been struggling against the
growth of book superstores, filed documents with the federal
superintendent of bankruptcy, voluntarily declaring insolvency and
putting itself into the hands of a receiver and trustee acting for
creditors. While the nine Lichtman's stores, all in the Toronto area,
will remain open for now, they will be 'operating in liquidation mode,'
said Peter Aykroyd, senior vice-president of BDO Dunwoody Ltd., the
trustee in bankruptcy acting on behalf of creditors. The decision to
wind down the business comes almost a month after Lichtman's filed for
protection from its creditors as it tried to find a way to restructure
the business.
Thai Bankruptcy Court Okays Thai Oil Debt Plan
Thailand's Central Bankruptcy Court today approved a $2.29 billion
debt restructuring plan for Thai Oil Plc, two days after all creditors
of the debt-ridden refiner had given their final approval, according to
Reuters. The court ruling will end a 16-month suspension of debt
repayments by the firm and is the largest single completed corporate
debt restructuring case in Thailand, the firm's financial adviser, Chase
Manhattan, said. The court ordered the firm's debt to be restructured by
the end of April, reducing debt to $1.4 billion from $2.29 billion.
'Creditors agreed with the plan, although they will not get their full
money back, because they think it is better not to let the company go
bankrupt,' Thai Oil Managing Director Chulchit Bunyaketu told reporters
after the court verdict. Thai Oil is scheduled to sign the restructuring
agreement with all creditors on April 3.
